Jim McGarry has moved on, and David Young has moved in. That’s the quick report on changes at the top of Coventry’s work comp unit – but more is coming.
McGarry, who reportedly has a solid relationship with Allen Wise, will be working on other tasks within the company. And no, this isn’t one of those executive sinecures hiding an internal exile. By all accounts McGarry is well respected and liked by his colleagues on the senior management team, and bigger things are in the offing.
Young came into the organization in the Concentra deal. Generally well regarded by customers, his promotion has been characterized by several as a good thing; he is viewed as more customer-oriented than execs from First Health.
The change was relayed to several Coventry work comp customers Friday and today, along with news about a restructuring of the IT support and maintenance functions. These were consolidated along with other product line support in the Coventry IT department; going forward work comp will have dedicated resources. No surprise here; there have been indications for several weeks that new CEO Allen Wise has been seeking to better allocate costs by product. More specifically there has been ongoing concern about SG&A expense for work comp.
The restructuring of provider contracting and relations is not yet final. That said, there are signs that work comp contracting will be handled by separate staff. While this will likely help reduce facility costs for other lines (that deliver over 80% of Coventry’s total revenues) without the market share of group and Medicare, comp contracting staff will find it very hard indeed to negotiate with facilities. Remember, comp only amounts to 2% of the typical hospital’s revenues.
With the hiring several weeks ago of Pat Scullion as work comp CFO at Coventry, the new management team is almost complete. And the timing of the Scullion hire was nothing if not fortuitous, as several sources indicate Aetna is seeking to renegotiate its PPO contract with Coventry. As Aetna is the de facto network for Coventry in multiple jurisdictions (Coventry has exclusive marketing rights for four more years), it is negotiating from a rather strong position – Coventry would be in a very tough spot without Aetna.
What makes this particularly interesting is the Aetna exec seeking to renegotiate the deal is Dan Fishbein, the same Dan Fishbein who ousted Scullion from his prior role as president of Aetna’s work comp unit. And yes, that was the same Pat Scullion who negotiated the original deal on behalf of Aetna.
Now that must make for a very fun negotiation session; Aetna is negotiating for a higher price (that’s just a guess) or better terms while sitting across the table is the guy who knows more about their financial position than anyone left at Aetna.
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Joe… If I were Coventry, I would not agree to a price increase from Aetna until they make a commitment to clean up their WC provider database and greatly improve their quality of service.
Any additional monies received by Aetna should be invested in the improvement of their operations. Specifically, they need to learn how to apply provider discounts accurately and elminate the manual application of discounts which causes most of the errors. Most importantly, they need to stop applying discounts to provider bills when they have no contract with that provider or the contract was termed many years ago. And when they confirm they have made an error and inform their clients to resubmit the EOBs for correction, they need to actually apply the correct discounts to the resubmitted EOBs vs. forcing their client to resubmit the EORs 3 or 4 times before they finally get it right.
They also need to provide their WC clients with a WC specific provider database for the development of functional WC provider panels. Otherwise, their clients might as well just use the Yellow pages to build panels as their current directory is useless for this purpose.
Additionally, the providers who participate in their WC network need to actually receive some benefit for their participation in Aetna as Aetna currently makes little or no effort to encourage their clients to utilize their participating providers.
I could go on and on and I guess I have, but the bottomline is that Aetna’s WC clients are experiencing seriously problems when accessing their network.
Aetna must respect the monopolistic position they now enjoy in the WC PPO arena and start acting like an entity that deserves such a position by cleaning up their act.
They need to operate their business as though they had competition and as though their clients had a choice whether or not to use them. Otherwise, when a viable alternative to Aetna does comes along, their clients will most certainly jump ship and never look back.
Hmmm, isn’t that what this post and many clients use to say about Coventry?
Ron… It most certainly is the same type of information that this post and many of Coventry’s clients had to say about Coventry. Now that Coventry exclusively access AWCA’s network in 18 or more states, it’s like the blind leading the blind.
Neither company has any desire to improve their quality of service as they enjoy monopolistic status in the PPO WC market. For their clients’ sake, let’s hope that changes in the very near future. If and until it does, we are at their mercy and believe me, they know and act like it.
Only the threat of a viable competitor will get them to light a fire under their butts and fix all of their multitude of problems.
So, since the acquisition of FOCUS, Coventry has finally made the determination that FOCUS knows the WC space better. To bad it took two years and a lot of money to figure this was the direction to go. Maybe this new direction will bring back providers and make others happier.
I suppose the reason I asked the simple question is that maybe is not blatant corporate disregard for clients, or lack of understanding of the WC market, but in fact a systemic problem of all large WC PPO networks? Aetna has the issue, Coventry has the issue, be assured Focus when they were stand alone network, had the issue. Yes data is bad…but how is it that GH networks (some owned by the same corporate organizations as these WC networks) do not have as bad of a data issue as WC networks seems to have? Perhaps that disconnection is worth examining?
I suppose the reason I asked the simple question is that maybe is not blatant corporate disregard for clients, or lack of understanding of the WC market, but in fact a systemic problem of all large WC PPO networks? Aetna has the issue, Coventry has the issue, be assured Focus when they were stand alone network, had the issue. Yes data is bad…but how is it that GH networks (some owned by the same corporate organizations as these WC networks) do not have as bad of a data issue as WC networks seems to have? Perhaps that disconnection is worth examining?
The data for WC is bad (compared to GH) for many reasons. First, WC networks lease many other networks and if one has horrible data it basically ruins all others data. Secondly, you can blame networks but providers are also resonsible for the bad data. In all the contracts I’ve seen the providers are suppossed to inform the network of any changes (i.e. address, phone, or going out of business). This rarely happens and thus the networks have no idea a change was made. Since recredentialing occurs every two years if something changes in this time (and the provider doesn’t inform the network) the data will be wrong.
Ron and Dave… Believe it or not, when we accessed the FOCUS network, we rarely encountered the application of incorrect discounts and most importantly, rarely had furious providers contacting us indicating they were not in the FOCUS network.
The problem occurred when FOCUS merged with FirstHealth to become Coventry and then Coventry made the decision to access the Aetna WC network vs. just their own network. They did so I assume because of the deep discounts AWCA has with hospitals due to their GH purchasing power.
We honestly cannot keep up with the current volume of provider complaints. Most importantly, when we bring the provider issues to AWCA’s attention, 99% of the time they respond that they applied the incorrect discount amount or they applied a discount to a non participating provider who terminated 3 or 4 years ago. Or better yet, never ever had a contract with AWCA. If you request a copy of the contract, it takes Aetna months to even find it. In the meantime, providers are filing fee reviews left and right with our state’s Bureau of WC and providers are being awarded the full fee schedule amounts plus 10% interest. It’s maddening. When this occurs, we have to refund our client’s PPO access fees and assure AWCA refunds ours. It’s nothing short of a nightmare.
And you both are correct, these are group health networks and not remotely specific to WC. We did a study of the network just in our state and over 60% of the providers in AWCA’s network do not treat WC injuries and 70% of them are not the appropriate specialities to list on WC provider panels. And sadly, the provider data is so outdated. It’s not the provider’s fault. For God’s sake, AWCA is operating a WC PPO and it’s their provider relations dept’s responsibility to contact the providers on at least a semi annual basis to maintain an accurate provider database for their clients, their revenue source. It’s their bread and butter and they should give a crap about it.
In the meantime, it would be a huge mistake for any entity to use these networks to create any type of WC panels for policyholders that would be considered remotely functional. Their network can sadly only be used to obtain backdoor discounts as AWCA does not have any real mechanism in place to direct patient referrals to their network providers.